Yael Selfin, Chief Economist at KPMG UK, comments on today’s Q3 GDP data
“Today’s GDP data shows the UK economy continued to regain momentum in the third quarter, with GDP rising by 0.6%, thanks to relatively strong consumer spending and a rebound in overall investment and exports growth. However, business investment contracted by 1.2%, and an historically erratic exports performance means this quarter surge is unlikely to last.
“The recovery in manufacturing coincided with the lift in exports but the latest PMI survey for manufacturing points at a slower outlook for the coming months. Construction also recovered strongly while surveys are pointing at a potentially longer lasting upturn. The pace of services growth was slightly slower with the exception of a pick-up in financial services this quarter, with expectations of a continued trend growth over the short-term.
“The upward momentum we have seen this quarter is unlikely to last. The outlook for the rest of the year is for a slightly weaker growth in the final quarter, as uncertainty around Brexit puts downward pressure on investment and relatively weak households’ finances rein in consumer spending. Our forecasts therefore remain for the UK economy to grow by 1.3% this year and by 1.6% in 2019.”
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